₦airaland Forum

lawani:
If ships can not pass through the strait then transportation becomes more expensive and supply becomes an issue pushing up the price. Once the price of crude goes up then Nigeria's federal government will gain but consumers of PMS will have to pay more for it. Nigeria will not sell to Dangote or anybody at lower than the international price. They are not even obliged to prioritize Dangote

Wisdom full ya head.... Make i send you two crates of cold trophy

givedemwotowoto:
Nigeria gets almost 1 million barrels of oil as their own share of daily crude production. They can set their price for the local market for the 327,000 barrels consumed locally daily, and sell the rest 60,000+ at international price. Must you always defend the government?

Must you always blame govt just because your Agulu candidate lost?
Is the refinery solely owned by the Govt?
Prices of fuel goes up and down in any free market economy. That's what we have now, free market. We no longer have market where prices are determined by govt which has been disastrous for generations with fuel lines and shortages.
Now, the market is free and the market determines the price.
This is what real economy looks like not rhe voodoo economy that we practiced and has gotten us anywhere gor decades.
Even if govt gets 1m barrels daily, it better 5o sell in open market and use the proceeds for capital expenditures instead of selling is cheaper to Dangote.
You people are very short sighted, always only thinking of today instead of the future. That's the big difference between Africans and Europeans. Very shallow and myopic.

obailala:
What you're asking for is basically 'oil subsidy'. The only way to keep pump prices low when it's expensive everywhere else is by subsidising.

So what is wrong with subsidy sir?
What is wrong with you as a citizen benefiting from your own common wealth…. Baba u pple should not be brainwashed by ur own goverment into to thinking that subsidy is an abomination ….. its a strategy of this govt because they know its the only way to truly give back to the pple…

givedemwotowoto:
This is a rejoinder to: Petrol Price May Hit N1,800 In Nigeria- Refiners Warn

20% of global oil passes through the Strait of Hormuz. We get it.

But here are the facts:

1. Almost all of Nigeria's crude oil is sweet crude.

2. Dangote Refinery has the capacity to process 650,000 barrels of crude oil per day.

3. Nigeria's daily consumption of crude oil is 327,000 barrels per day (or 52 million liters per day).

4. This means Dangote Refinery can process 100% of Nigeria's daily consumption locally.

So for the defenders of fuel price increase, explain to us why there is fuel price increase at Nigeria's petrol stations.

Before you come with Canada argument, let me preempt you:
Most of Canada’s crude is heavy crude and almost half of the 16 refineries can’t refine heavy crude, so the crude oil needs to be exported to the U.S. for refining. Because it is exported abroad, global oil price will affect it: you export at a high price due to demand, you import at a higher price.

Because global crude oil prices will go up and FG will sell to dangote at international market price (no subsidy) and will not subsidise what we consume from dangote refinery.


Assuming our economy didn't tank before 2023 - there would have been a small possibility of retaining subsidy but that's another complicated discussion.

PigTormentor:
Tinubu does not determine price of crude oil. Dangote is required to buy oil from the oil companies at international going prices.
Chevron will not sell oil to Dangote at reduced prices when they can sell it for more on open market.
Keep blaming Tinubu for everything.

And what about the naira-for-crude deal between NNPC and Dangote Refinery?

We shouldn’t blame Tinubu for everything, but he certainly blamed Goodluck Jonathan for everything wrong with that regime

Thunder 🔥⚡🔥⚡ you there

Ofunaofu:
And what about the naira-for-crude deal between NNPC and Dangote Refinery?

Naira for crude means that they will accept Naira equivalent of whatever the current price is.
They don't have to source for dollars which would put more pressure in the naira.

givedemwotowoto:
Nigeria gets almost 1 million barrels of oil as their own share of daily crude production. They can set their price for the local market for the 327,000 barrels consumed locally daily, and sell the rest 60,000+ at international price. Must you always defend the government?

exactly my point on the other thread. Like I don't understand. Sell 327k at a low price and the rest at international price. The govt will still make money. The projected price for crude in financing the budget is even $50. I don't just understand why Nigerians are defending this rubbish increment

advanceDNA:
So what is wrong with subsidy sir?
What is wrong with you as a citizen benefiting from your own common wealth…. Baba u pple should not be brainwashed by ur own goverment into to thinking that subsidy is an abomination ….. its a strategy of this govt because they know its the only way to truly give back to the pple…

I think Nigeria has grown beyond the subsidy argument. My concern is what the government should be doing with the funds allegedly saved from subsidy removal, not about reintroducing subsidy payments.

PigTormentor:
Must you always blame govt just because your Agulu candidate lost?
Is the refinery solely owned by the Govt?
Prices of fuel goes up and down in any free market economy. That's what we have now, free market. We no longer have market where prices are determined by govt which has been disastrous for generations with fuel lines and shortages.
Now, the market is free and the market determines the price.
This is what real economy looks like not rhe voodoo economy that we practiced and has gotten us anywhere gor decades.
Even if govt gets 1m barrels daily, it better 5o sell in open market and use the proceeds for capital expenditures instead of selling is cheaper to Dangote.
You people are very short sighted, always only thinking of today instead of the future. That's the big difference between Africans and Europeans. Very shallow and myopic.

what capital expenditure? It's been three years since subsidy was removed, what has the common man benefitted for it? Don't tell me federal allocation to states has increased because you know that has not impacted the common man

givedemwotowoto:
This is a rejoinder to: Petrol Price May Hit N1,800 In Nigeria- Refiners Warn

20% of global oil passes through the Strait of Hormuz. We get it.

But here are the facts:

1. Almost all of Nigeria's crude oil is sweet crude.

2. Dangote Refinery has the capacity to process 650,00

0 barrels of crude oil per day.

3. Nigeria's daily consumption of crude oil is 327,000 barrels per day (or 52 million liters per day).

4. This means Dangote Refinery can process 100% of Nigeria's daily consumption locally.

So for the defenders of fuel price increase, explain to us why there is fuel price increase at Nigeria's petrol stations.

Before you come with Canada argument, let me preempt you:
Most of Canada’s crude is heavy crude and almost half of the 16 refineries can’t refine heavy crude, so the crude oil needs to be exported to the U.S. for refining. Because it is exported abroad, global oil price will affect it: you export at a high price due to demand, you import at a higher price.

The simple answer is that, Nigeria government still sell crudes to Dangote at the international market rate. The higher the cost of crude oil goes in international market, the higher Dangote sells his refined products.

What kind of question is this? You don't know the price of crude oil is universal? If the Straight of Hormuz is closed, 20% of global supply of petroleum will be cut off from the supply chain and the price of crude oil will go up and every country will suffer it, Nigeria inclusive.

Equity15:
exactly my point on the other thread. Like I don't understand. Sell 327k at a low price and the rest at international price. The govt will still make money. The projected price for crude in financing the budget is even $50. I don't just understand why Nigerians are defending this rubbish increment

It beats the imagination

Tinubu will use the money for election campaign and settlement to all his radical thugs

PigTormentor:
Naira for crude means that they will accept Naira equivalent of whatever the current price is.
They don't have to source for dollars which would put more pressure in the naira.

Read this

givedemwotowoto:
Nigerians consume only 327,000 barrels daily out of over 1.6 million barrels produced daily, and the government still makes huge profit.

In addition to that, government still has over 1.3 million barrels to sell to the rest of the world at the global oil price and make even bigger profits

Why must the local population pay the price of rising global prices even when their purchasing power is already very low from Tinubu’s policies?

If a government truly cares about the people’s welfare, why can’t it protect the masses from the immediate impact of the U.S.–Israel–Iran war by adopting the policy above, especially since Nigeria is an oil-producing nation?

Equity15:
what capital expenditure? It's been three years since subsidy was removed, what has the common man benefitted for it? Don't tell me federal allocation to states has increased because you know that has not impacted the common man

Increased federal allocation has not reached the common man? Civil servants who have been getting their salaries on time are not common man? You people have very short and bad memories.
Just some years ago, some states were struggling just to pay salaries. We don't hear that anymore.
The MMA reconstruction is for the common, the many road constructions going on all over the country is for the common man.
The common man will not receive free money or food from the govt.
What the govt is expected to do is to start capital projects like airports, roads, schools and many more that rhe common man needs to make life easier.
In the process of building these capital projects, the common man will be employed to build them. All the people working on all rhe roads and Airport renovation are not rich people, some of them are common men.
The common man will.also benefit from capital expenditures when those working on these projects gets paid and spend those salaries on school fees, buy food, help other family members etc.
The govt will not and should not just give money to people for free, they should invest those money into capital projects and the economic gains will get down to the "common man" in the long run.
That's how you build a good middle class, not by just giving people food for a day and then they are hungry for the rest of the year.

obailala:
I think Nigeria has grown beyond the subsidy argument. My concern is what the government should be doing with the funds allegedly saved from subsidy removal, not about reintroducing subsidy payments.

This one is different from subsidy payments. Let’s use a simple Math:

You sell tomatoes produced from your farm. It costs you N500 to produce each basket. You sell each basket for N1,000 locally. In the international market, you sell $2, that’s the global price.

There is flood somewhere in Australia where a lot of tomatoes are also produced, so demand abroad pushes global price to $4.

You still produce it for N500, nothing changed.

As a tomato company funded with the tax money of your community members, will you raise the price for locals to N2,000 just because the global price changed, even when your N500 production cost didn't change?

I don't see why it should affect us pretty much. if the strait is closed, it means the IOCs in Nigeria can't export the 40% crude to the west, can they just reroute all of that crude to dangote? because if they don't, they may be forced to shut down production soon like kuwait.

givedemwotowoto:
This one is different from subsidy payments. Let’s use a simple Math:

You sell tomatoes produced from your farm. It costs you N500 to produce each basket. You sell each basket for N1,000 locally. In the international market, you sell $2, that’s the global price.

There is flood somewhere in Australia where a lot of tomatoes are also produced, so demand abroad pushes global price to $4.

You still produce it for N500, nothing changed.

As a tomato company funded by your community members who pay tax, will you raise the price for locals to N2,000 just because the global price changed?

you really haven't gotten it. Nigeria belong OPEC, and as a member of OPEC, they cannot sell crude below OPEC price, even the crude being sold to dangote, is sold in Naira equivalent of the international price. Another problem responsible to the fuel increase is that the naira for crude policy is inconsistent, that is the government have not been consistent in delievering that crude cargo to dangote forcing him to import crude from other sources, and he would definately buy them in current price approaching $100 dollar per barrel. so price increase in inevitable and then the solution to this is for government to have its own refinery even if its modular, maybe 1 modular refinery in each region of Nigera or better still return fuel subsidy.

This thing is not rocket science, it is achieveable. Why do we have to buy oil at international price when we have crude and we refine it here. Must our people suffer?

integrity16:
you really haven't gotten it. Nigeria belong OPEC, and as a member of OPEC, they cannot sell crude below OPEC price, even the crude being sold to dangote, is sold in Naira equivalent of the international price. Another problem responsible to the fuel increase is that the naira for crude policy is inconsistent, that is the government have not been consistent in delievering that crude cargo to dangote forcing him to import crude from other sources, and he would definately buy them in current price approaching $100 dollar per barrel. so price increase in inevitable and then the solution to this is for government to have its own refinery even if its modular, maybe 1 modular refinery in each region of Nigera or better still return fuel subsidy.

Who sold these lies to you? Inside your own country too, something as important as this, you bought some lies without verification, and came to defend them.

OPEC doesn’t stop a member country from selling crude below international price, especially for local consumption.

OPEC mostly sets production quotas, not mandatory selling prices.

Any country can sell to their local refineries at any price they choose. If you come to the international market, that’s when price matters, and it’s mostly based on the forces of demand and supply.

obailala:
I think Nigeria has grown beyond the subsidy argument. My concern is what the government should be doing with the funds allegedly saved from subsidy removal, not about reintroducing subsidy payments.

Lol…..
baba…. U dont get it….. i can see u are feeling robbed by the govt which is normal…..but u dont know why u feel that way…
..first try to get it... Go and look at any good nation….from US to germany, australia to sweden….

without subsidy the govt is robbing you heavily because its the only way the common wealth can leave the hands of few govt officials and reach as many pple as possible….

No matter the country sir, if the money meant for many pple is not channelled into what everyone can benefit from….. few will steal the money because there will be too much money in the hands of few

Imagine this…. The uk govt that subsidizes health care and education which virtually everyone currently benefits from.. suddenly the govt says let remove these subsidies so we can do more……. As in….which more?? Na embezzlement go end the issue

MrPresident1:
Absolutely nothing.

Dangote will be nationalized. It is just a matter of time

Even in Iran where they are fighting, the price of petrol is less than N60 per litre.

What they are doing to Nigerians is evil.

The price of petrol is heavily subsidized in Iran. It's just about N40 per litre. Now do you want us to go back to the subsidy era? Do you think we can go back to subsidy era?

Why would the government ban export of shea butter and force farmers to sell at local price and encourage the sale of crude to Dangote at the international benchmark price?

cunny88:
But then we should have some benefits as citizens of an oil producing and oil refining country.

Initially, the excuse was that refineries were not working and we had to import refined crude, what is the excuse now

We are still importing crude at least 50% of the crude dangote were imported because foreign companies are in charge of oil exploration. Nigeria only makes little money from the crude oil.
To make matter worse, the Buhari Government sold our oil in advance as collateral for loans which means in the next 20 years most income from our crude goes to loan servicing. We all know that the guys who put us in that mess (Amaechi, Aregbe and co) are now the new Messiahs of obedients.

givedemwotowoto:
If your friends pay you a lot of taxes on their personal and business income, pay VAT for what they buy from your stores, pay multiple taxes and fees for even bank transactions……..

then yes you sell petrol lower to them if they consume only 20% of your crude oil output, if that petrol is one of the most essential things they need in the country to be productive.

This is common sense.

My ogar why you dey suffer yourself argue with With Daniel Bwala? Even if you carry the entire economic textbook chook for him head, he still won't be able to comprehend

It still hasn't answered the question, why will the shit of shit affect oil price in Nigeria

advanceDNA:
Lol…..
baba…. U dont get it….. i can see u are feeling robbed by the govt which is normal…..but u dont know why u feel that way…
..first try to get it... Go and look at any good nation….from US to germany, australia to sweden….

without subsidy the govt is robbing you heavily because its the only way the common wealth can leave the hands of few govt officials and reach as many pple as possible….

No matter the country sir, if the money meant for many pple is not channelled into what everyone can benefit from….. few will steal the money because there will be too much money in the hands of few

Imagine this…. The uk govt that subsidizes health care and education which virtually everyone currently benefits from.. suddenly the govt says let remove these subsidies so we can do more……. As in….which more?? Na embezzlement go end the issue

UK that subsidize health care and education ( which ironically the Nigerian government also subsidizes, otherwise hospital operations would be costing in the tens of millions)...their citizens also pay massive taxes for the privilege

Taxes which if they bring them to Nigeria people would be protesting massively.

The problem with subsidy in Nigeria is that most of our revenue comes from oil and borrowing. Oil money has never been enough for all of us. Unless you want to pretend that 2million bpd is enough for 230 million, and even if we were 100 million it won't be enough at all.

If subsidy came back now, we would eventually reach the same point we were in 2014 where there was borrowing to pay for salaries simply because subsidies were eating government revenue badly. There was a good reason why subsidy should have gone in 2012. You guys refused to cooperate then so here we are.

Thanks to years of subsidy, we are in severe debt. That means that any windfall goes to paying off that debt . And bringing back subsidy would worsen the debt as is.

Unless you want the kind of tax rates they pay in the UK, Nigeria cannot afford subsidy.

I didn't say corruption doesn't exist. It does. I am also not defending any of your corrupt leaders. I am pointing out why subsidy would be a bad idea financially for us. And yes, bad decisions by your leaders and the corruption implicit in consumption subsidies led us here. There are good reasons to vote out apc in 2027.

Unless you want us to go back to what buhari was doing, printing money to pay for the thing , which landed us in even more debt.

integrity16:
you really haven't gotten it. Nigeria belong OPEC, and as a member of OPEC, they cannot sell crude below OPEC price, even the crude being sold to dangote, is sold in Naira equivalent of the international price. Another problem responsible to the fuel increase is that the naira for crude policy is inconsistent, that is the government have not been consistent in delievering that crude cargo to dangote forcing him to import crude from other sources, and he would definately buy them in current price approaching $100 dollar per barrel. so price increase in inevitable and then the solution to this is for government to have its own refinery even if its modular, maybe 1 modular refinery in each region of Nigera or better still return fuel subsidy.

OPEC doesn’t set crude oil prices.

OPEC doesn’t tell any country how much it should sell oil to its local market.

A country can decide to leave OPEC and sell at prices it wishes.

Russia, USA and European oil producers are not members of OPEC.

African oil producing countries, Venezuela and Arabs are those in OPEC. OPEC is filled with just 12 countries

success1smyn:
The price of petrol is heavily subsidized in Iran. It's just about N40 per litre. Now do you want us to go back to the subsidy era? Do you think we can go back to subsidy era?

Why do you think it’s subsidized in Iran? That they chose to sell at such low price to their people doesn’t make it subsidized.

Fuel is basically cheaper than water in many Middle Eastern countries.

Mrtaye:
You are not just all about business but also about the welfare of your people

Simple question you begin de rigmarole
Are you doing business or welfare

Sheuns:
Why do you think it’s subsidized in Iran? That they chose to sell at such low price to their people doesn’t make it subsidized.

Fuel is basically cheaper than water in many Middle Eastern countries.

Crude oil is a global commodity and its price is determined globally. A country can decide to refine it and sell it at any price to its citizens, and when it is sold below the actual cost, it means it is subsidized.
Subsidy in itself is not a bad thing, but there are several factors to consider, such as the population, how much oil the country produces, and the country's dependence on oil.
The reason fuel subsidy does not make much sense in Nigeria is that we are too dependent on oil and our population is very high compared to what we produce. This means we would end up using a large portion of our oil revenue to maintain the subsidy, leaving us with less money to do many other important things.